arrive at component costs and system performance. In light of these deficiencies, the committee is unable to ascertain whether S&L’s projected capital costs and LECs are more accurate than those of SunLab and others.

Finding: The committee finds that the S&L report would benefit from a clear characterization of financial uncertainty in cost analysis, including uncertainty associated with estimates of capital or other costs; how uncertainties propagate to 2020; the uncertain effects of changes in market interest on debt; the effect of and uncertainty in lenders’ perception of risk; and how risk might be managed or reduced as the technology evolves. Associated with this concern, the committee finds that insufficient attention is given to the sensitivity of the projected LECs to the financial parameters used in the modeling. Given the high capital cost associated with CSP plants, special attention should be given to the sensitivity of LECs to interest on debt. The committee finds that the above omissions call into question the reliability, accuracy, credibility, and utility of the S&L analysis. However, the committee also finds that these omissions are a correctable defect in the report.

Recommendation: The committee recommends that DOE invite S&L to address the omissions and issues raised above, preferably in a management letter to DOE to be made available simultaneously with and attached to the final S&L report.

Finding: The committee is particularly concerned that the Executive Summary in the S&L report is subject to misinterpretation because of lack of description or proper qualification (particularly in the Conclusions), of the methods, assumptions, and financial parameters used in the analysis. The committee is concerned that S&L’s numerical estimate of the confidence in or reliability of the projected LECs, particularly within the limitations of an executive summary, is subject to misinterpretation.

Recommendation: In conjunction with its recommendation to remedy key omissions in the S&L report, the committee urges DOE to request a revised executive summary that clarifies and points out the important limitations of the analysis methods, key assumptions, and parameters in this study.

The clear theme of the committee’s findings and recommendations is that the limited charge to the S&L team, as well as the inadequate time and resources provided, resulted in an analysis and a report that do not fully answer the question that DOE seems to be asking—Do CSP plants have the potential to be competitive by 2020? Under those constraints the S&L team did not do a bottom-up cost analysis of the possibilities (or probabilities) of reducing the cost of CSP plants. Rather, it relied on a SunLab model and put in some of its own judgment. A true “due diligence” study would require four to five times more time and resources. Eventually this is the level of effort that will be required to address the long-term economic viability of CSP technology and to establish its competitive position against other renewable systems in the DOE portfolio.



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